THE IMPACT OF CGPI, COMPANY SIZE, AND LEVERAGE ON EARNINGS MANAGEMENT AND THEIR IMPLICATIONS TO THE INTEGRITY OF FINANCIAL STATEMENTSTLE
Abstract
In accordance with the problems raised in the study, the purpose of this study is to find out, test, and analyze the effects of CGPI (corporate governance perception index), company size, and leverage on earnings management and their implications for the integrity of financial statements, both partially and simultaneously.The research method used is quantitative data analysis. Sampling using purposive sampling method that result to be eight companies which consistently followed CGPI programs respectively from 2011-2017 and listed on the Indonesia Stock Exchange. Data analysis technique is path analysis and data is processed using SPSS statistic software.The results showed that, in sub-structure 1, CGPI partially had no significant effect on earnings management. While company size and leverage have a significant effect on earnings management. CGPI, company size, and leverage simultaneously have a significant effect on earnings management. In sub- structure 2, CGPI, company size, leverage, and earnings management partially and simultaneously have a significant effect on integrity of financial statements. Earnings management is not an intervening variabel among the relationship of CGPI, company size, and leverage with integrity of financial statements.
Keywords: CGPI, company size, leverage, earnings management, integrity of financial statements.Full Text:
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